Deus Forex Machina

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Macro Morning: Gold surges

Gold surged on Friday night to $1396 oz. after the release of some very poor housing data from the US. New home sales were expected to fall in July but only 1.4% so the 13.4% drop was a huge miss and we saw the US dollar and other markets react instantly. Gold is now just

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Macro Morning – Stocks and Aussie higher

Yesterday the Twitterverse was agog at the likelihood that after six down days in a row the Dow was likely to rally last night – and so it came to pass with US stocks up across the board even after the Nasdaq had to suspend trading after some glitches hit its network. At the close,

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Macro Morning: Australia dollar down

Rightyo so the Fed didn’t say anything contentious or unexpected and as David has written this morning in his piece on the Jedi Fed “When the Fed tapers now is really immaterial. The possibility of it is all that matters.” Which of course is dead right and what really hit markets overnight. The key phrase from

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Macro Morning: No safe harbour here

Over the past month there has been a strong divergence in economic release between the G10 (strong), the BRIC’s (weak) and emerging markets (weak but not as weak as the BRIC’s). This data flow has ignited a capital flow away from emerging markets and back toward developed markets as we saw with the strong rally

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Macro Morning: US dollar confusion

Last night’s price action in the US dollar and sell of in US stocks is dedicated to Frankie Valli. Oh what a night! The USD was strong early after jobless claims fell to an almost 6 year low of 320,000 but the the absolute collapse of the Philly Fed index knocked the dollar from its

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Macro Morning: Healing

Data out of Europe overnight continued the recent trend of better than expected performance for the EU and other developed markets. GDP growth for Q2 was a great and very welcome surprise was the pick up in French GDP of +0.3% (-0.1% expected), German GDP (+0.7% v 0.6% expected) and overall EU GDP which was +0.3%

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Macro Morning: Yield spike

Bonds rates around the world moved higher, sharply so, overnight on the back of the better than expected data in the US and in Europe. Retail sales in the US looked disappointing on the face of it printing just 0.2% against 0.3% expected but this was largely because auto sales were lower with the core

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Macro Morning: Australian dollar highs

Is it just me or was the price action in gold and the US dollar over the first day of the week and the data from Japan a little sign that maybe a safe haven trade might be gaining a bit of traction once again. Lets think about what we have to drive this type

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Macro Morning: Australian dollar strength

The Chinese data changed the whole game plan yesterday with the much better than expected outcomes of +5.1% for exports and +10.9% for exports igniting rallies in the Aussie and the commodity bloc currencies, in copper and other global metals and overnight giving a more positive tone to stock markets. Data in Germany though was pretty poor

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Macro Morning: Tapered enthusiasm

Interesting night overnight with more Taper talk in the US, a less dovish than expected Bank of England Governor Mark Carney and a much stronger yen than anyone could really imagine given the challenges of the Japanese economy. In the end it was taper talk which hit the US stock markets which were down a

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Macro Morning: Australian dollar strength

Taper talk was the big thing overnight with Charles Evans from the Chicago Fed putting it back on the table as early as September to some traders minds although I think based on what he said it is more likely to be a Dectaper rather than a Septaper. Stocks didn’t like this message and given

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Macro Morning: Australian dollar bounce?

Is the Aussie Dollar low in? It’s a question worth asking after the move to 0.8846 yesterday was just 16 points above the tentative trend line that I have drawn on the weekly charts. Many readers will think that the trend line stuff is witch craft but techincals are a big part of my toolkit.

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Macro Morning: Dectaper

A very interesting night on markets and particularly FX markets Friday after the non-farm payrolls missed to the downside printing just 162,000 rather than the 184,000 that the market had expected. The disappointment ignited some serious US dollar selling across the board. What was striking by the end of play however was just how poorly the

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Macro Morning: Stocks erupt

It seems Goldilocks is in the house again with the reinforcement of lower rates and the better than expected data in both Europe and the US driving stocks and the US dollar higher overnight. We’ve seen a reaffirmation of low rates for the long term from the three big central banks (Fed, BoE and ECB) at a time when the

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Macro Morning: Australian dollar sales south

Stocks in the US didn’t rally last night but you would have to ask yourself why not given the Goldilocks nature of the releases. GDP data was stronger than expected coming in at 1.7% (annualised, not really strong but better than expected) with a GDP deflator of just 0.7% against expectations of 1.0% down from 1.3%

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Macro Morning: Australian dollar down

Glenn Steven’s Anika Foundation speech lived up to expectations I had for it yesterday. Over many years now Governor Stevens has used this speech to look at the structure and outlook for the economy and it has become his best speech for the year. Yesterday did not disappoint with the Governor making it clear that

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Macro Morning – Markets worried about the Taper

  Nothing terribly exciting overnight but the price action across the board clearly reflects a bit of near term concern about the potential that the Fed will signal its intention to taper at the FOMC meeting this week. Accordingly, it seems that there was a bit of a risk-off move (as over used as that phrase

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Macro Morning: Eye of the storm

This is a huge week. I’d posit it is the biggest week of the year in terms of central bank announcements and data releases and I’d suggest that by the end of this week we may not still be any clearer on where the Fed is at with regard to the Septaper (unless non-farm payrolls

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Macro Morning: Hilsenrath moment

The Fed must be pleased, the Oracle they have spawned is doing his darnedest to get the message across but in the meantime is causing materially increased volatility in FX markets at least but also in stocks and bonds. I’m using pleased in this context as a pejorative because while it has been important for

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Macro Morning: Gold surge

Rightyo, so yesterday was an interesting day. A day where the Japanese push toward monetary accommodation and a weaker yen was reinforced by the G20 and the Upper House Japanese election but the yen gained. I’m not actually sure it had anything to do with the yen. It looks more like a US dollar move

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Macro Morning: Abenomics gets a lift

It could be a big day for markets in Asia today given the resounding victory of the ruling LDP Party of Japanese Prime Minister Shinzo Abe in Upper House elections over the weekend. For the first time in 6 years, and since Abe left the office of PM the last time, both Houses will be

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Macro Morning: Higher and higher

The focus has rightly been on Ben Bernanke this past two days and the Fed Chairman faced the Senate overnight for the second day of quizzing and questioning. As with the previous session in front of the House Bernanke gave soothing sounds about the difference between tapering and tightening rates and made it clear the

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Macro Morning: Bernanke on message

Hats off to the Fed Chairman for being able to have delivered the message last night that the Fed is going to taper but it is a path that is not set in stone either. After a couple of months of volatility on the back of the Fed Chair’s and his colleagues words this is

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Macro Morning: Waiting for Bernanke

Not much matters in the next 24 hours other than the words Fed Chairman Bernanke utters tonight up on Capitol Hill. There is plenty of room for clarification of last week’s clarification of the difference between a taper and an interest rate rise. There is plenty of room for obfuscation if lawmakers press him too hard

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Macro Morning: S&P bull

Markets in the US made a new all time closing high on the Dow and S&P again overnight after the Chinese GDP data was not as bad as it might have been and many feared and the weaker than expected retail sales which print just 0.4% against the 0.8% expected undermined notions of the taper